Error of Law: An Exception to the Discoverability Principle?

Abstract

Under Canadian common law, the limitation principle of discoverability applies to errors of fact, but not to errors of law. This error-of-law exception is a problematic doctrine. It appears to resurrect the ostensibly defunct fact/law distinction in civil claims. It stands in contrast to contemporary English precedent on the discoverability of mistakes of law. It controverts the Supreme Court of Canada’s claim that discoverability is a “general rule” for the interpretation of limitation periods on causes of action. And it considerably curtails the reach of the discoverability principle and the potential for plaintiffs labouring under an error of law to benefit from an extended limitation period. In practice, the error-of-law exception may overly curtail rights by protecting those who make legal rules while impeding those who have been harmed by unjust laws. This article develops a revised understanding of the error-of-law rule that strikes a better balance between protecting past reliance interests and vindicating plaintiffs’ rightful positions.

Keywords: private law, restitution, mistake of law, Limitation Act, limitation postponement, reasonable diligence, Kleinwort Benson, Deutsche Morgan Grenfell, Franked Investment Income Group, Prudential Assurance, Nielsen, Central Trust v Rafuse, Goodswimmer v Canada, Salna v Awad, Canadian Legion Norwood